Outlet Compare-At Prices Trigger Lawsuits

In 2014, analysts estimated that up to 85 percent of outlet merchandise was manufactured specifically for outlet stores, while lawsuits alleged that some retailers used cheaper materials and construction than their mainline products. Consumers filed class actions against Nordstrom, Levi Strauss, Ralph Lauren, and four other major retailers over "suggested retail" and "compare at" prices. The plaintiffs claimed these tags made outlet-exclusive products appear discounted from prices charged at traditional stores, even though the retailers had allegedly never intended to sell the products there. The lawsuits accused the companies of false advertising, unfair competition, and violating California consumer-protection law.

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